The notion that pensioners are about to become a burden on Australian workers is ridiculed in a research paper.

The report, by Monash centre for population and urban research, says that while the cost of the age pension has grown faster than gross domestic product over the past decade, demographic ageing is not the cause.

Ian Hammet. Photo: Teagan Glenane

"The rising costs have been due to discretionary policy changes," the report says.

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On Sunday, Clive Palmer – whose Palmer United Party will hold the balance of power in the new Senate in July – said his party would not support a rise in the aged pension to 70.

Mr Palmer’s position will cause a headache for the government. Treasurer Joe Hockey has spent the past few weeks explaining why a rise in the age pension is inevitable.

On Monday, Katharine Betts of Swinburne University will publish The ageing of the Australian population: triumph or disaster.

Her report says fears a dwindling proportion of tax-paying workers will be unable to support a growing proportion of age pensioners are "unfounded".

"Even with no further growth in labour force participation rates, the proportion of workers will not fall as low as it was in the 1960s," the report says.

Ian Hammet, 69, juggles his time running an online games store on eBay and managing the Australian Cricket Society’s website.

Mr Hammet, who used to own a chain of shops selling board games and puzzles, started working from home eight years ago after he sold his flagship city store.

"I kept doing what I did best, which was selling games. I’m pretty busy with both jobs," he said.

Mr Hammet said raising the pension age was "inevitable" and older Australians still had a lot to offer the workforce.

"When you get to your 60s, you start slowing down but I think it's good for people to keep working," he said. "It keeps the mind active. We can still contribute and we're active and capable of working."

Dr Betts blames government decisions for the apparent increased costs of ageing, such as the decision to widen access to the pension and to abolish tax on superannuation payouts.

She also notes that the labour force participation of older Australians is close to a record high.

"Some opinion makers are happy to deride baby boomers, [but] this does not help older people cope with discrimination," she writes.

"In a more positive social environment, labour force participation rates for older people would be even higher.

"A comparison of data from 31 OECD [Organisation for Economic Co-operation and Development] countries shows no association between their age structure and rates of labour-force participation."

The Netherlands, Switzerland, Norway and Canada all have older populations than Australia but have higher labour force participation.

Dr Betts says only about 40 per cent of taxes are based on paid labour, meaning the remaining 60 per cent are likely to be unaffected as the population ages.

Other OECD data shows no association between the proportion of a country’s population aged over 65 and the proportion of its GDP spent on health.

The US has one of the youngest populations in the OECD but spends 18 per cent of its GDP on health. Japan has the oldest but spends only 9 per cent.

The health of older people is improving.

"British research finds that dementia rates among people aged 65-plus fell by 24 per cent between 1991 and 2011," the paper says.

On Sunday, Mr Palmer said his party would not support increasing the age pension to 70.

"I just couldn’t employ Joe Hockey or Tony Abbott at 69 no matter how competent they are," Mr Palmer told the ABC. "They wouldn’t have a good future and I wouldn’t invest the time in training them because they’d be retiring the next year.

"I know Mr Abbott and Mr Hockey are not too concerned about the pensioners of Australia because they’ll have a big fat parliamentary pension that you’ve paid for. I think that’s the whole nub of it, really."

146 comments

"I know Mr Abbott and Mr Hockey are not too concerned about the pensioners of Australia because they’ll have a big fat parliamentary pension that you’ve paid for. I think that’s the whole nub of it, really."

Love him or hate him, Clive Palmer has hit the nail right on the head there.

Commenter

EmilyA

Date and time

Sun Apr 27 22:13:40 UTC 2014

Who is going to employ all of these aged people anyway?????? Will it be at a cost to youth unemployment with grandpas & grandmas serving us at Macca's??

Commenter

Bazza

Date and time

Sun Apr 27 22:46:46 UTC 2014

I agree completely. I'm not a big CP fan - he's opinions are quite polarising, however he makes a lot of sense here. Politicians lack empathy for others because they are never subject to the same rules - i.e. having to live on a limited pension or none at all.

Commenter

Let's make Sandwiches

Location

Wollongong

Date and time

Sun Apr 27 23:04:43 UTC 2014

EXACTLY !! Palmer is the only politician who gives a rats about 'real' people

Commenter

Yes Minister

Location

Woop Woop

Date and time

Sun Apr 27 23:09:51 UTC 2014

Agreed - I’m surprised by him, but pleasantly so.

Also can we all just take a moment to remember our elderly were once the able bodied stalwarts that were the main labour force, who paid tax, who raised the next generation, who built and laid the current (imperfect but somewhat sturdy) paths we all tread on - surely we should not be so forgetful to forget their contributions nor should we be so heartless to quantify the worth of the individual solely by their current earning capacity.

Nevermind, let’s just euthanise them all so we can turn them into dog food so the Government can purchase some offshore military toys.

Commenter

Jill

Date and time

Sun Apr 27 23:18:14 UTC 2014

@EmilyA:Pensions, pensions, pensions. It seems the only subject worthy of debate when the so called budget emergency is analysed. What Joe Hockey is overlooking is that the fortnightly payments to all welfare recipients are in fact a stimulatory measure to the consumer economy and if payments are reduced consumer spending will fall accordingly. As these payments are generally fully expended on the purchase of necessities, this will in turn impact on the small business sector resulting in lower turnover, lower profits and lower tax payments to the government. As the saying goes, money is made round to go round.

Commenter

JohnC

Location

Gosford NSW

Date and time

Sun Apr 27 23:21:08 UTC 2014

@EmilyA: "Love him or hate him, Clive Palmer has hit the nail right on the head there."

Correlation is not causation. It's not because of their fat Parliamentary pensions, but because Big Business demands that the Budget be balanced at the expense of the working class. Removing the tax rebate for diesel fuel used in the mining industry, for example, could bnng in a huge amount of money. Cutting back on superannuation concessions for the rich could also pay big dividends.

The Government won't either of these, because it rules for the rich. There's a class war going on, but only one side is fighting. We see here an example of how it fights.

Commenter

Greg Platt

Location

Brunswick

Date and time

Sun Apr 27 23:23:16 UTC 2014

Yes Clive is correct.....the researchers are saying what many stats are saying that I have read...Australia has the least aging popluation of most in the OECD world ...most have around 20% elderly predicted in the future, auss has around 15 % and getting less with the around 200,000 to 250,000 new immigrants that are coming here each year.

If the Fed gov keeps reducing the money it puts into society through aiming at surpluses, and the banks have tightened up on lending because of Basel 111 rules, and because auss has the highest private debt owed to private banks in the developed world, then there simply is going to be NO jobs for the elderly in society........there is a lack of jobs for the youth now, around 50% unemployment in some areas, so where are the jobs going to suddenly appear from if there is a lack of money circulating in society?.......

Commenter

Moot

Date and time

Sun Apr 27 23:29:17 UTC 2014

Yes, but it's easy to make popular criticisms from the sidelines. What is Clive suggesting as an alternative policy to rein in the deficit? Nothing. But from your comment and the responses it seems the majority of voters are easily fooled so I guess he's on to a good strategy. Also, I must have missed the part where Clive promised to repeal the current parliamentary super entitlements. Talk is cheap. What legislation has Clive's PUP passed? None. What have they achieved other than hot wind? Nothing.

@Bazza. Your argument is the same drivel some put forward when there was a push to increase female participation decades ago: "oh they'll take all the men's jobs". Did that happen? NO. What happened in the real world is that productivity/tax receipts/terms of trade all improved. The head of treasury recently said that our biggest problem over the coming decades will be finding enough skilled workers. Hmm, perhaps some of those older workers could fill the breach. But I'm sure you know more about economics than the head of treasury.

Commenter

JamesM

Date and time

Sun Apr 27 23:31:49 UTC 2014

Ever notice how companies increase their profits with ever declining number of workers? The same is true of Australia. We don't need a large population to maintain pensions or our standard of living.